Zak v. State Farm Mut. Liability Ins. Co.

• Decision Date: 25 February 1965
• Citation: 42 Cal.Rptr. 908,232 Cal.App.2d 500
• Court: California Court of Appeals Court of Appeals
• Parties: Margaret ZAK, Plaintiff and Appellant, v. STATE FARM MUTUAL LIABILITY INSURANCE COMPANY, a corporation, Defendant and Respondent. Civ. 21947.

Page 908

42 Cal.Rptr. 908

232 Cal.App.2d 500

Margaret ZAK, Plaintiff and Appellant, v. STATE FARM MUTUAL LIABILITY INSURANCE COMPANY, a corporation, Defendant and Respondent.

Civ. 21947.

District Court of Appeal, First District, Division 1, California.

Feb. 25, 1965.

Mattew M. Fishgold, San Francisco, for appellant.

Bledsoe, Smith, Cathcart, Johnson & Rogers, San Francisco, for respondent, Robert A. Seligson, San Francisco, of counsel.

SIMS, Justice.

Appellant appeals from a judgment entered for respondent following granting of the latter's motion to strike those causes of action in her complaint in which reference was made to respondent.

From the complaint it appears that the litigation arises out of an automobile accident which occurred on December 1, 1962. Plaintiff, appellant herein, was riding as a guest in the vehicle of one Jones when it was struck by a vehicle operated by defendant Grassly and was then pushed into the vehicle of defendant Romick. As a result she suffered injuries for which she seeks to recover damages. The first cause of action alleges negligence of Grassly, the second that of Romick, and the third seeks relief against either or both. (See Code Civ.Proc. § 379c.)

In her fourth cause of action plaintiff refers to and incorporates the allegations of the first cause of action (against Grassly), and alleges that there was in force and effect a policy of automobile insurance issued by respondent, ¹ and that she was 'an insured' under said policy of insurance. She quotes the provisions of the policy entitled 'COVERAGE U--Damages for Bodily Injuries Caused by Uninsured Automobile,' which conclude: '* * * provided for the purposes of this coverage, determination as to whether insured or such representative is legally entitled to recover for damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company, or, if they fail to agree, by arbitration.' She alleges on information and belief that Grassly was operating an uninsured automobile, and then states, 'That a dispute has arisen between plaintiff and defendant [naming respondent] as to whether the said defendants [naming Grassly and numerous fictitious defendants as set forth in the first cause of action] are uninsured and as to whether or not the provisions of Coverage U of said policy of liability insurance are applicable to this dispute, and as to the amount of plaintiff's damages.' It is finally alleged: that the same facts as will have to be established to determine the liability of the individual defendants will have to be established to resolve any claims against respondent; that such procedure will be burdensome and time consuming if required before two separate tribunals; that medical testimony and medical evaluation will be necessary to determine the nature and extent of her personal injuries; and that she seeks the aid of the court to avoid multiplicity of actions and proceedings.

The fifth cause of action incorporates all of the foregoing allegations and refers to a policy of automobile liability insurance issued to the plaintiff by the defendant Farmers Insurance Exchange (not a party to this appeal) with a similar uninsured motorists clause. She alleges that she is entitled to recover on this policy on certain contingencies and that she should not have to establish such claim separately.

The prayer, insofar as respondent is concerned, is as follows: '2. That the defendants STATE FARM MUTUAL LIABILITY INSURANCE COMPANY and FARMERS INSURANCE EXCHANGE be declared by this Court to be bound by the judgment against said remaining defendants;

'3. That a determination be made as to whether the said MARSHALL PERSHING GRASSLY was an uninsured motorist under the terms of said policies of insurance hereinabove referred to;

'4. That the liability of each and both of said insurance companies be determined and that plaintiff have judgment against said defendants-insurance companies in the sum of TEN THOUSAND DOLLARS * * *.'

To the foregoing respondent interposed its demurrer and its motion to strike the fourth and fifth causes of action and any reference to State Farm Mutual Liability Insurance Company on the ground that those portions of the complaint contain irrelevant matter. Respondent cited Code of Civil Procedure, § 453; Insurance Code, section 11580.2(e); and State Farm, etc., Ins. Co. v. Superior Court (1956) 47 Cal.2d 428, 304 P.2d 13 in support of its motion. In its points and authorities it pointed to the arbitration provisions of its policy as set forth in the complaint and alleged that the matter was being handled as an arbitration matter.

At the hearing on the demurrer and motion plaintiff's attorney filed an affidavit setting forth that plaintiff had offered to arbitrate and had named an arbitrator to that end, that respondent had failed, refused, and neglected to name an arbitrator, and had waived its right to arbitration. The affidavit refers to two letters from plaintiff's attorney to respondent's claims agent as being attached thereto. These letters are part of the record and reflect an original notice and claim to respondent dated February 26, 1963, and a demand for arbitration and appointment of an arbitrator dated April 11, 1963. The record contains two other letters, which from the clerk's transcript appear to be part of the affidavit, but which are not referred to therein. The first indicates that on July 26, 1963 the attorneys for respondent requested that plaintiff give her deposition as a statement under oath in support of her claim, and that she furnish proof that Grassly was uninsured at the time of the accident. In the second, lated August 14, 1963, plaintiff's attorney advised respondent's attorneys that suit had been filed and that the deposition could be taken in connection with the suit. He acknowledged that since the tortfeasor was in fact uninsured the dispute should be resolved by the arbitration clause of respondent's policy.

At the hearing in the trial court the demurrer was ordered off calendar, and the motion to strike was granted. The reporter's transcript reveals that argument of the respective attorneys as to whether the arbitration clause precluded suit or whether it had been waived was rendered irrelevant because the court summarily determined that such issue was improperly before it on the basis of the State Farm case, supra, 47 Cal.2d 428, 304 P.2d 13. Judgment was thereafter entered for defendant for its costs.

At the hearing before this court it was stipulated that respondent had conceded at all times since making the motion that the provisions of its policy covered plaintiff.

It is concluded, as set forth below, that the court erred in striking the allegations on the grounds stated; that the order and judgment cannot be sustained on the grounds that the controversy is arbitrable; but must be remanded for a determination of that question and for appropriate proceedings by stay, or otherwise, thereafter.

In State Farm, etc., Ins. Co. v. Superior Court, supra, 47 Cal.2d 428, 304 P.2d 13, the court granted a writ of mandamus to compel the trial court to sever a declaratory relief action from a personal injury action which had been consolidated with it for trial. An examination of the facts of that case indicates that it is concerned with the lower court's exercise of discretion under Code of Civil Procedure, section 1048, governing severance and consolidation of actions as authorized 'wherever it can be done without prejudice to a substantial right.' The decision points out that the joint trial would put the petitioner in the position of arguing inconsistent positions, and would inject the question of insurance coverage into the personal injury action. The opinion recites: 'It is therefore clear that the declaratory relief action and the personal injury actions could not be consolidated for trial 'without prejudice to a substantial right' of petitioner, and that the trial court abused its discretion in ordering such consolidation.' (47 Cal.2d at p. 432, 304 P.2d at p. 15.)

It may be assumed that under similar circumstances it would be an abuse of discretion to refuse to sever the trial of several causes of action which are originally joined in one action. It does not follow, however, that an action may not be commenced for personal injuries against those primarily liable joining therein those allegedly secondarily liable in separate causes of action. The controlling sections of the Code of Civil Procedure are: Section 427 governing joinder of causes of action which in subdivision 8 permits joinder of 'Claims arising out of the same transaction, or transactions connected with the same subject of action, * * *' and sections 379, 379a, 379c and 383 which deal with the question of what persons may be named as defendants. These sections have been construed as permitting joinder of a surety or an insurer where the benefits of the contract directly run to the plaintiff. (Kane v. Mendenhall (1936) 5 Cal.2d 749, 753-755, 56 P.2d 498; Grier v. Ferrant (1944) 62 Cal.App.2d 306, 312-314, 144 P.2d 641.) ² The foregoing authorities have been relied upon in interpreting the provisions of section 442 of the Code of Civil Procedure as authorizing the filing of a cross-complaint against a person allegedly primarily liable be he a codefendant (Atherley v. MacDonald, Young & Nelson, Inc. (1955) 135 Cal.App.2d 383, 387, 287 P.2d 529), or a new party (Roylance v. Doelger (1962) 57 Cal.2d 255, 260-261, 19 Cal.Rptr. 7, 368 P.2d 535, quoting Atherley, supra). In the last case the court points out the distinction between joinder of causes and action and parties and consolidation or severance of issues for trial as follows: 'Moreover cross-defendants' argument that the issues tendered by the cross-complaint are 'much more complicated' than those raised by the pleadings as between plaintiff and defendant and that defendant is 'not...